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Royal Bank of Canada beats Q4 estimates with strong investment banking

Published Nov 30, 2023 09:34
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The Royal Bank of Canada (TSX:RY) (RBC) has reported robust fiscal fourth-quarter results, with its corporate and investment banking revenue reaching a near two-year peak. The strong performance in the capital markets division, which saw net income jump by 36%, was a significant contributor to the bank's outperformance. A notable deferred tax adjustment further bolstered RBC's gains, adding $578 million and bringing adjusted earnings per share (EPS) to $2.78. This figure surpassed the average analyst estimate of $2.62.

Despite the positive earnings, RBC faced higher credit loss provisions than anticipated, amounting to $720 million. Meanwhile, City National Bank, a subsidiary of RBC in the United States, registered an adjusted net loss of $89 million following a substantial capital infusion of nearly $3 billion from RBC over the past year.

In addition to its earnings news, RBC is currently awaiting final approval from Canada's Finance Minister Chrystia Freeland for its potential expansion through the acquisition of HSBC Canada. The proposed $13.5 billion deal has already cleared antitrust hurdles but is facing some opposition.

RBC's strong quarter comes at a time when the financial industry is grappling with the impact of the Bank of Canada's rate hikes on consumer finances. Nonetheless, the bank's capital and global markets divisions have demonstrated resilience, contributing to RBC's profit strength.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Royal Bank of Canada beats Q4 estimates with strong investment banking
 

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